Gold steadies as US and Iran flag early progress in peace talks

[SINGAPORE] Gold steadied after the US and Iran flagged early progress in negotiations to end the war that’s upended global markets and stoked inflation.

Bullion was near US$4,190 an ounce, having gained nearly 1 per cent in the previous session to snap a three-day decline. US Vice-President JD Vance said that talks over the weekend with Iran were “very, very good” and Iranian officials also cited headway, although plenty of obstacles remain as the two sides look to fulfil a memorandum of understanding signed last week.

Among other things, a communication line between Teheran and Washington was formed with the aim of securing safe passage for vessels through the Strait of Hormuz. The US also issued a 60-day license allowing Iran to sell some oil on the international market.

Crude prices steadied on Tuesday (Jun 23) after a decline.

Gold is down about a fifth since the war began at the end of February. The near-closure of Hormuz has choked oil and natural gas flows and pushed up energy prices, raising the likelihood that central banks will hike borrowing costs to combat inflation. This is a headwind for precious metals, which do not pay interest.

Spot gold was little changed at US$4,191.27 an ounce at 7.16 am in Singapore. Silver slipped 0.05 per cent to US$65.05. Platinum and palladium were also flat, while the Bloomberg Dollar Spot Index was marginally lower. BLOOMBERG